Notes & Sources

NOTES: The repayment rate is defined as the percentage of borrowers in each repayment cohort whose payments reduced the loan principal by at least one dollar after the specified number of years. Repayment status on each loan is attributed to the school for which the loan was taken. Therefore, a student can be counted in the repayment cohorts of more than one institution.

SOURCES: U.S. Department of Education, College Scorecard data; calculations by the authors.

In all sectors, the share of borrowers who have made some progress paying down their student debt increases as time in repayment increases. The largest increments are for borrowers from for-profit institutions, where the repayment rate for borrowers who entered repayment in 2007-08 and 2008-09 rose from 31% after one year to 41% after seven years.

After seven years, 41% of borrowers from for-profit institutions had reduced their loan balances by at least one dollar. This repayment rate was lower than the one-year repayment rates in all other sectors, including public two-year colleges, where the repayment rate rose from 45% after one year to 53% after seven years.

Borrowers can be in good standing without paying down the principal owed. They may be enrolled in an Income-Driven Repayment (IDR) plan. Some may have no required payments and, for others, the required payments may be too small to cover the interest charged, leading to increases in the balance owed. In addition, borrowers may be in deferment or forbearance and not required to make payments in their current circumstances.